Big Oil companies are betting $ 50 billion on oil and gas projects that would be unviable in a low-carbon world, Carbon Tracker has warned, goals.
In a reports titled “Breaking the Habit – No change in large companies are 'Paris-aligned, and what they need to do there,' the climate change think-tank lists several oil and gas projects and examples of Big Oil divergent investment strategy for the future. These include the $ 13-billion LNG Canada project, the $ 3.6-billion expansion of the Gorgon LNG project, Exxon's Aspen oil sands project, which will cost $ 2.6 billion, and the $ 1.3-billion Zinia 2 deepewater project led by BP, Exxon, Total, and Equinor.
Carbon Tracker says a Paris-compliant world would need less oil and gas, which would make a lot of these projects unviable in such a world. Under a scenario where global warming is stopped at 1.6 degrees Celsius, the energy industry would need an 83 percent lower capex, the think-tank says Under a 1.7-1.8 degrees scenario, oil and gas capex would be 60 percent lower.
Yet, according to the report, Big Oil is not preparing for a Paris-compliant world, judging by the recent project approvals. While Carbon Tracker is critical of this fact, it seems to be the realistic scenario.
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A recent study, for example, warned China's Belt and Road initiative alone could compromise the success of the Paris Agreement. The initiative, the Tsinghua Center for Finance and Development says in the study, involves 126 countries, excluding China. These countries together account for 28 percent of emissions from human activity.
"We have a business-as-usual scenario that says if you continue the way we are even in every country, which includes US, Europe, China and India – goes on a 2C pathway, this is still going to blow the carbon budget, "says Simon Zadek, a fellow at the Tsinghua Center.
By Irina Slav for Oilprice.com
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